Government should build construction procurement expertise

14 September 2012

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15 September 2012 | Anna Reynolds

Public sector buyers need to learn how to secure and manage construction contracts more effectively, according to a report by the All Party Parliamentary Group for Excellence in the Built Environment.

The public sector is the construction industry’s largest single client accounting for nearly 40 per cent of spending (£46 billion a year) in infrastructure and projects according to the Office of National Statistics.

Sir Tony Baldry, Conservative MP and chair of the group, said: “As the squeeze has tightened on public spending, it is more imperative than ever that public sector clients and their suppliers work together to lower the cost of building procurement to the public purse.

“Nothing short of a cultural shift is needed by public sector clients, if they are to develop a lasting and sustainable behavioural improvement, and Government will need to commit the necessary support and resources to make this happen.”

The report, A better deal for public building, addressed the problems surrounding public procurement. A lack of trust between clients and suppliers, insufficient expertise in the public sector, together with a prevailing culture of taking the lowest price as evidence of best value were cited as the main reasons public projects being delivered late or over budget.

The report devised 13 recommendations to improve public sector building calling upon the government to set up a ‘Best Practice Procurement Advisory Group’ to assist inexperienced public sector clients to adopt appropriate procurement arrangements for the size and type of project.

The report also suggested clients should learn from London 2012 where contracts were selected not on the basis of lowest price but against specified criteria, of which sustainability should be one.

There is also a need for better guidance to help prevent the public sector from over-interpreting EU procurement rules, which can create barriers to entry for vendors. Further, under the government’s preferred procurement routes, only integrated teams of designers, builders, contractors and asset managers, should be hired.

In evidence to the group, Richard Saxon, a client adviser representing the Royal Institute of British Architects (RIBA), outlined the demands on buyers overseeing construction projects: “These days, public clients are expected to be able to do five key things: set up a decisive stakeholder team; know how their project will create the outcomes required; know how to take it to market and at what price; be able to communicate with the supply chain; and sponsor the project successfully from start to finish,” he said.

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